Osborne's wage rise plan could hurt small firms

CALLS by Chancellor George Osborne to raise the national minimum wage have been met with caution by Derbyshire business leaders.

Yesterday, Mr Osborne said the "economy can now afford" to raise the rate, currently set at £6.31 an hour for people over the age of 21.

The call comes after Labour claims that the economic upturn had not translated into improved living standards.

Some reports suggest that the minimum wage could rise to around £7 an hour.

But Chris Hobson, of the Derbyshire, Nottinghamshire and Leicestershire Chambers of Commerce, said a rise could have an impact on smaller businesses. He said: "Ministers must remember that as well as their wage bills, businesses face a raft of other costs to employ people.

"There is also a danger that the impact of such an increase would fall disproportionately on firms with only small staff numbers – the very companies which have helped drive the recent growth in our economy."